TaxTMI 
TaxTMI 
2019 (2) TMI 1280
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....f for executing the work in accordance with the terms of the MoU dated 26th March, 2013. The work order contemplated a period of thirty six months and back-to-back arrangements for the defendant paying the plaintiff upon obtaining the payment from North-eastern Coalfields after keeping a margin of 12.50% of the actual rate of the letter of intent issued by NEC. In other words, the money received by the defendant from NEC would be paid by the defendant to the plaintiff after deducting the rate of margin mentioned in the MoU. The relevant clauses of the MoU are set out below. "(f) That the party of the First part will keep 12.50% on account of its margin of actual rate as per LOI issued by North Eastern Coalfields Limited (NECL) and will pay the Balance amount to the party of the Second part. (g) That the party of the first part will make to the party of the Second part, immediately after receiving the payment from North Eastern Coalfields Limited, after deduction of TDS as per Income Tax Act, 1961 and the Mutually agreed amount as per point no. (f) i.e. 12.50% of value of work done." The petitioner/plaintiff is admittedly not privy to the contract between the....
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....ow that a rate of 5% had been kept by the defendant as commission). 4. According to Mr. Banerji, the amounts reflected in the Forms 26AS for the relevant years is an absolute admission on the part of the defendant that it received payment of the entire money from NEC and intended to make payment of the agreed amount to the plaintiff or has already made such payment to the plaintiff after retaining the commission of 5% as agreed between the parties. He submits that the fact of the TDS deposited reflected in the Form 26AS amounts to an acknowledgement of liability that a total sum of Rs. 118,17,32,782/- is due and payable by the defendant to the plaintiff. Counsel relies on Electro Flame Ltd., Hyderabad vs. Mittal Iron Foundry Pvt. Ltd reported in AIR 1998 AP 203 for the proposition that admission of a jural relationship of debtor and creditor can be found to exist from Sales Tax Declaration Forms relating to the transactions in question between the concerned parties. Counsel further relies on two Division Bench decisions of this court; Arvind Metals Vs. Sonu & Soni Finvest Company Pvt. Ltd and Dolly Mazumder & Ors. Vs. Zee Telefilms Limited on the point of TDS certificates being ....
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....in ACTAL Vs. India Infoline Limited reported in MANU/MH/1768/2012, Having gone through the decisions, it appears that admission of an existence of a jural relationship is not the same as acknowledgment of liability of a specific amount outstanding to an alleged creditor, unless the books of accounts of the alleged debtor reflects the amount as a debt or money kept aside and liable to be paid to the creditor in question. It should be mentioned that the decision of the Delhi High Court in Rahul Jain Vs. Vasant Raj Pandit reported in (2015) SCC Online Del 10900 was given in a case under Order XII Rule 6 of the CPC where it was held that TDS certificates would fall in the category of evidentiary admission as opposed to judicial admission of evidence which can form the basis of a decree for decree of a suit. 7. The three documents relied upon by the plaintiff which the plaintiff considers sufficient for a judgment on admission have to be seen in the context of the interpretation given to Order XII Rule 6 of the CPC by the courts. i) The TDS certificates: Under Section 194C of The Income Tax Act, 1961, a person responsible for making any payment to a contractor for work done pursua....
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....d from Sales Tax Declaration Forms. In Dolly Mazumder, the respondent was directed to make payment of the amount deposited as TDS to the appellant after the Division Bench came to the conclusion that the TDS had not been mistakenly credited to the account of the appellant. In Arvind Metals, the TDS certificates were accepted as destructive of the defence set up by the appellant who was resisting winding up proceedings filed against it. None of the two decisions of this court explain the evidentiary value of TDS Certificates in the context of admission of specified liability. Section 194C casts a mandatory obligation upon a person who has entered into an agreement with a contractor to deduct an amount prescribed under the Section and deposit the same with the Revenue. Form 26AS for the relevant year is only issued to the contractor (assessee) after the TDS has been deposited by the deductor (the person who has engaged the contractor). The percentage of the tax deducted will arise only after the person receives the bill from the contractor and the liability under the bill accrues, which is in consonance with the mercantile method of accounting where the liability has to be account....
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....,143.29 RA Bill 37= 17,94,529.02 RA Bill 38= 25,03,150.00 RA Bill-39= 23,42,940.84 Total 5% Amount= 1,02,07,373.43. As per the discussions held on 15.11.2015, you have assured us that you will utilize the total 100% received against the RA Bills for the payments against the project and will not deduct the 5% commission on RA Bills. " (2) Defendant: We are surprise to read your email that you are calculating our commission, But please tell us if there is outstanding more than five crore against you then in which method you calculate our share. We are taking this share as per our agreement and at present we are doing our best for Tirap site. I again want to inform you that our share is 6% not 5% and we will send this calculation to you in next bill. Ranga ji when you give us site operation at that time you well known the condition of your site. You was help less to supply diesel, spare parts and even tyres to Tirap site as per their requirement. We have no sufficient funds to pay your outstanding also. So if you want to clear your market immediately through us then ask your management to release our standing otherwise we ....
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....reed, partially or otherwise, must be clear, unambiguous and free from doubt. It must be of such an unequivocal nature that a defendant will not be in a position to explain the admission in a factual context. The principle enunciated by Justice Raveendran in Himani Alloys Limited Vs. Tata Steel Limited reported in (2011) 15 Supreme Court Cases 273 should be reiterated and the relevant part is set out: "It is true that a judgment can be given on an "admission" contained in the minutes of a meeting. But the admission should be categorical. It should be a conscious and deliberate act of the party making it, showing an intention to be bound by it. Order XII rule 6 being an enabling provision, it is neither mandatory nor peremptory but discretionary. The court, on examination of the facts and circumstances, has to exercise its judicial discretion, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore unless the admission is clear, unambiguous and unconditional, the discretion of the court should not be exercised to deny the valuable right of a defendant to contest t....